On Wednesday the U.S. Supreme Court issued its much-anticipated decision in Young v. United Parcel Service, Inc.(UPS), which involves a claim of pregnancy discrimination under the Pregnancy Discrimination Act (PDA).

Young, a UPS driver, claimed that UPS intentionally discriminated against her by refusing to accommodate her pregnancy-related lifting restriction by transferring her to a light duty position. UPS countered that its refusal to accommodate was based on a legitimate, non-discriminatory business reason. Namely, its refusal was based on provisions of a collective bargaining agreement that provided light duty only to drivers who were injured on the job, who had lost their Department of Transportation certifications and who suffered from a disability covered by the Americans with Disabilities Act (ADA).

UPS won dismissal of the claim on summary judgment, which the Fourth Circuit Court of Appeals affirmed. In a 6-3 vote, the Supreme Court vacated summary judgment for UPS and remanded to the Fourth Circuit Court of Appeals to reconsider whether summary judgment is appropriate under a new standard for liability under the PDA. The majority decision, penned by Justice Breyer, was joined by four other Justices as well as a concurring decision by Justice Alito. Justices Scalia, Thomas and Kennedy dissented in two separate dissents, one written by Justice Scalia and the other by Justice Kennedy. ate treatment claims brought under the PDA.

The new standard announced by the Court is a twist on the three-stage burden shifting paradigm established in McDonnell Douglas Corp. v. Green, 411 U. S. 792 (1973), used to evaluate disparate treatment discrimination claims. However, the Court made clear the new standard is applicable solely to PDA claims where the plaintiff has asserted that she has been denied an accommodation for a pregnancy-related work restriction given to others who are not pregnant but similar in their ability or inability to work. In such a case, if an employer has pointed to a neutral policy as its legitimate reason for the differential treatment (and denial of the accommodation), a plaintiff can demonstrate that the policy is a pretext for disparate treatment discrimination by proving that the policy imposed a “significant burden” on pregnant workers and that the reasons for the policy are not “sufficiently strong to justify the burden.”

The PDA and the Parties’ Positions in Young

Congress passed the PDA as a response to the Supreme Court’s decision in General Elec. Co. v. Gil­bert, 429 U. S. 125. In Gilbert, the Court held that General Electric’s policy, which provided paid leave benefits to employees who were unable to work due to nonoccupational sickness and accidents but did not provide the same paid leave benefits to women who were unable to work due to pregnancy-related disabilities, was lawful and did not constitute sex discrimination within the meaning of Title VII.

The PDA amended Title VII of the Civil Rights Act of 1964 (Title VII) to clarify that discrimination on the basis of sex includes discrimination on the basis of pregnancy, childbirth and related medical conditions. It goes on to state in a follow-on clause that “women affected by pregnancy, childbirth, or related medical conditions shall be treated the same for all employment-related purposes, including receipt of benefits under fringe benefit programs, as other persons not so affected but similar in their ability or inability to work, and nothing in section 2000e–2 (h) of this title shall be interpreted to permit otherwise….”

Young argued that the second clause of the PDA requires employers to give women disabled by pregnancy “most-favored-nation” treatment and provide them the same accommodations it provides to other persons with disabling conditions that have a similar effect on their ability to work, even if the accommodations are denied to other non-pregnant individuals with similar disability-related work-restrictions. The U.S. Solicitor General endorsed Young’s interpretation of the PDA and advocated the same interpretation of the statute. Conveniently, the U.S. Equal Employment Opportunity Commission (EEOC) issued guidance in 2014 after the Supreme Court accepted Young’s petition for certiorari supporting the interpretation of the PDA that Young and the Solicitor General were advocating.

UPS argued that this second clause merely required non-discrimination, not preferential treatment or “most favored nation” status. Because employees disabled by pregnancy and by off-the-job injuries were treated similarly under UPS’s policy, UPS argued it could not be liable for intentional discrimination on the basis of pregnancy — the rationale accepted by the lower courts.

The Majority Decision in Young

The majority decision by the Court in Young rejected the positions advocated by both Young and UPS and established a new balancing test applicable to claims of intentional discrimination based on a refusal to accommodate pregnancy. Under the new standard, a plaintiff can show intentional discrimination by showing that a policy relied on as the non-discriminatory reason for the failure to accommodate a pregnancy-related disability imposes a “significant burden” on pregnant workers and that the reasons for the policy are not “sufficiently strong to justify the burden.”

According to the Court, evidence that an employer “accommodates a large percentage of non-pregnant workers while failing to accommodate a large percentage of pregnant workers” could be evidence of a “’significant burden.’” The Court elaborated that if there is sufficient evidence that an employer “provides more favorable treatment to at least some employees whose situation cannot reasonably be distinguished from the pregnant employee’s situation,” a plaintiff could demonstrate pretext if the distinguishing factors are not sufficiently strong to justify the burden on pregnant employees. The Court also stated that seniority, disability arising from performance of hazardous duties or other “special need” would be legitimate, nondiscriminatory reasons for differential treatment under a policy, but greater expense and less convenience would not be sufficient distinguishing factors.

The Court did not find that UPS had intentionally discriminated against Young on the basis of pregnancy. In fact, it recognized that UPS’s policy was facially non-discriminatory and that there were other UPS workers with medical restrictions who were not accommodated for the same reasons Young was denied accommodation.

Importantly, the Court refused to accord any weight to the controversial 2014 pregnancy accommodation guidance issued by the EEOC after the Court had granted certiorari in the UPS case. The Court called a spade a spade, noting the convenient timing of the guidance and that it was inconsistent with prior positions on the PDA taken by the government. The Court found these suspicious facts severely limited the guidance’s “power to persuade,” nullifying the guidance, which the EEOC will now have to revise.

Notable and Quotable Dissents

Justices Scalia, Thomas and Kennedy dissented, criticizing the new standard for being inconsistent with the plain language of the PDA and conflating “disparate impact with disparate treatment by permitting a plaintiff to use a pregnancy-neutral policy’s dispropor­tionate burden on pregnant employees as evidence of pretext.” In a separate dissent, Justice Kennedy elaborated that the new standard injects “unnecessary confusion in the disparate treatment test.”

Justice Scalia’s and Thomas’s dissent harshly criticizes the majority decision as “splendidly unconnected with the text and even the legislative history of the [PDA].” They accuse the majority decision of ‘bungling the dichotomy between claims of disparate treatment and disparate impact” and “making up” new interpretations of the PDA that its plain language “cannot reasonably bear.” In their view, a neutral policy is subject to attack solely under a disparate impact theory of liability (a claim that Young never asserted), and disparate treatment requires disparate treatment of similarly situated employees with evidence of an intent to discriminate.

Justice Kennedy’s dissent is written in an entirely different tone. In Justice Kennedy’s view, “[T]he difficulties pregnant women face in the workplace are and do remain an issue of national importance,”, but he recognized that other laws such as the Family and Medical Leave Act, the 2008 amendments to the ADA, and new state and local laws requiring accommodation of pregnancy “honor and safeguard the important contributions women make to both the workplace and the American family.” In other words, Kennedy ultimately concluded that the Court should not have stretched the meaning and intent of the PDA, a straightforward non-discrimination statute, to include an accommodation obligation absent proof of differential treatment on account of pregnancy.

Take-Away

The decision is the first time the Court has interpreted the PDA since holding that Congress intended the PDA to be “a floor beneath which pregnancy disability benefits may not drop – not a ceiling above which they may rise.” California Federal Save. & Loan Assn v. Guerra, 479 U.S. 272 ( 1987). In the Guerra case, the Court rejected a challenge to California’s Pregnancy Disability Law, which provides unpaid job protected leave related due to pregnancy-related disabilities and requires transfer to a light duty position if available as an accommodation for pregnancy-related disabilities. That decision was driven in part by the common federalism concern that state laws can extend protections further than federal law so long as they do not conflict with federal law, and so did not necessarily offer direct guidance to the outcome in Young. The Court did not overrule Guerra, leaving intact the idea that some nominal “preferential treatment” of pregnancy-related disability may be permissible; however, it squarely rejected the notion that pregnancy-related disabilities are entitled to “most favored nation” status.

In the end, however, the UPS decision may have little impact on employer policies and future PDA claims. As the majority decision recognizes, statutory changes including the 2008 amendments to the ADA, as interpreted by the EEOC may “limit the future significance of our interpretation of the Act.”   (The Court explicitly refused to take a position on the extent to which the ADA as amended might cover temporary disabilities.)  Additionally, as Justice Kennedy recognized, numerous state and local laws offer the relief Young was seeking and, indeed, UPS itself acknowledged that it had changed the very policy at issue in the case to comply with newly enacted laws. Like UPS, many other employers have modified policies to comply with recently enacted state and local laws requiring accommodation of pregnancy.